The government's evaluation of the future of the economy may be off by a startling magnitude, and, if so, the money which will be added to bank balance sheets over the next several months may be entirely inadequate.

The IMF and a number of highly regarded private analysts forecasts losses at major banks around the world at a level much higher than the US government has supposed. Their more pessimistic predictions are based on the economy getting much worse than it is now and staying worse for a number of quarters. The IMF also expects derivatives write-off to rise by hundreds of billion of dollars over the next two years. The "stress tests" do not take that level of catastrophe into account.

The public relations campaign packaging the bank stress tests is kicking into high gear and our professional information managers are really hitting their stride. They face, of course, a classic spin problem: you need to get the information out there, but you don't want to be too definitive on the first day or soon after - if you're easy on the banks, that looks bad; if you're tough on the banks, that might be dangerous.

The best way to handle this is by jamming your own signal - which they are starting to do in brilliant fashion. To the WSJ you leak that BoA needs to raise a great deal of capital ($35bn); they run this story on the front page, next to a great frown on the face of Ken Lewis. But you tell the FT that Citi will need "to raise less than $10bn" (note that the on-line FT version of this story, as of 8:30am Eastern, seems to have been adjusted downwards relative to the print edition that arrived at my house 4 hours ago.) The NYT yesterday sounded quite upbeat.

Of course, deliberately or inadvertently confusing people is made much easier by the fact that the experts are in sharp disagreement.

The excitement over the bank tests was an important replacement for the thrill of Bernie Madoff's weird and exotic life. He was remarkably clever and had great skill in robbing otherwise intelligent people blind. A careful analysis of Madoff's actions has not uncovered much that was not clear in the first few weeks of the investigation other than the fact that the people who gave him money were not intelligent at all. Madoff was such an improbable monster that the public followed the story with untiring fascination week-after-week. Once Madoff went to prison, the magic wore off. The stress tests became a perfect replacement.